Stewart: “It’s time to cut the tax on milk, bread and eggs”

NASHVILLE (March 28, 2011) – We need to get rid of Tennessee’s tax on food and HB 537 is a step in the right direction.

HB 537 offers a simple trade – cut Tennessee’s food tax – one of the highest in the nation – and pay for it with a tax on sugar sweetened beverages, which have been linked by many experts to the epidemic of childhood obesity.

Stewart: "It's time to cut the tax on milk, eggs and bread"

“Families have to buy food, but they can cut back on non-essential items like soda when times get tough,” said the bill’s sponsor, State Representative Mike Stewart.

Even with the proposed tax, soda would remain cheaper than it was in the 1970’s, adjusted for inflation. “With the use of high fructose corn syrup instead of cane sugar, the price of soda has come way down whereas the price of food is going through the roof. This is one way to help a young family buy food without imposing a new tax on businesses that might hurt the economic recovery,” Stewart observed.

Additionally, studies show that much like the increase in the cigarette tax this would likely lower consumption and improve health, an increase in soda taxes also can lower the obesity rate for high risk children.

The fiscal note for the bill shows that the proposed 1% reduction in Tennessee’s food tax, which would reduce Tennessee’s rate to 4.5%, would be entirely paid for by the increased tax on sugar sweetened beverages. Beverages that are not sugar sweetened, such as diet sodas, would be taxed less under the proposed change. “For most families, this will be a well-deserved tax break,” Stewart noted.

The bill is scheduled to be heard in the House Budget Subcommittee on Wednesday, March 30, 2011 at 11:00am.